RENEWABLE HEAT INCENTIVE (RHI)

1. Table of Tariffs (RHI for industry, business and large organisations)

Levels of Support Tariff Name Eligible Technology Eligible Sizes Tariff Rate (Pence/kWh) Tariff Duration (Years) Support Calculation Small Biomass Solid Biomass: Municipal Solid Waste (incl. CHP) Less than 200 kWth Tier 1: 7.6 20 Metering. Tier 1 applies annually up to the Tier Break, Tier 2 above the Tier Break. The Tier Break is: installed capacity x 1,314 peak load hours, i.e.: kWth x 1,314 Tier 2: 1.9 Medium Biomass 200 kWth and above; less than 1000 kWth Tier 1: 4.7 Tier 2: 1.9 Large Biomass 1000 kWth 2.6 Metering Small ground source Ground source heat pumps; Water source heat pumps; deep geothermal Less than 100 kWth 4.3 20 Metering Large ground source 100 kWth and above 3 Solar thermal Solar thermal Less than 200 kWth 8.5 20 Metering Biomethane Biomethane injection and biogas combustion, except from landfill gas Biomethane all scales, biogas combustion less than 200 kWth 6.5 20 Metering

RENEWABLE HEAT PREMIUM)

2. Table of likely levels of Renewable Heat Premium - details to be published in May 2011

Heat Technology Payment per Installation Air source heat pumps £850 Biomass boilers £950 Ground source heat pumps £1,250 Solar water heating £300

Tariff levels for heat pumps have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems, with additional compensation for certain technologies for an element of the non-financial cost. The tariffs have been calculated on the basis of a required return on additional capital invested of 12 per cent for technologies and fuels except solar thermal.

Heat output is to measured through metering using a Class 2 heat meter (Annex MI-004 of the EU Measuring Instruments Directive (MID) 2004) and the support calculated by multiplying the amount of heat used for eligible purposes by the tariff level.

As for the Feed-In Tariffs, tariff levels will be index-linked to the RPI and degression will be applied for future installations.

RHI payments are to be claimed by, and paid to the owner of the heat installation and payments will be made quarterly

DEGRESSION

Over the years it is expected that the costs of renewable heat equipment will fall as the industry matures and economies of scale are achieved, both in the UK and globally. As a result the Government would look to reduce RHI support levels for new projects, to ensure that the scheme delivers value for money. There are two ways support levels could be reduced. Firstly, through scheduled or early reviews and secondly through degression. Under the degression approach, once triggered, support levels would automatically drop by a given percentage for new projects accredited under the scheme. Existing projects would retain their current level of support and so would be unaffected.

Notes

The word 'owner' has its standard meaning, so the owner of an installation will be the person with exclusive rights and liabilities in respect of that installation. The owner will therefore usually be the person who purchased and paid for the installation of the equipment.